ENTREPRENEURSHIP.pdf

ENTREPRENEURSHIP
ENTREPRENEUR: WHAT IT MEANS TO BE ONE AND HOW TO GET STARTED

WHAT IS AN ENTREPRENEUR?
• A person who undertakes the risk of starting a new business venture is called an entrepreneur.
• An entrepreneur creates a firm to realize their idea, known as entrepreneurship, which aggregates
capital and labor in order to produce goods or services for profit.
• Entrepreneurship is highly risky but also can be highly rewarding, as it serves to generate economic
wealth, growth, and innovation.
• Ensuring funding is key for entrepreneurs: Financing resources include SBA loans and crowdfunding.
• The way entrepreneurs file and pay taxes will depend on how the business is set up in terms of structure

HOW ENTREPRENEURSHIP WORKS
Entrepreneurs commonly face many obstacles when building their companies. The three
that many of them cite as the most challenging are as follows:
Overcoming bureaucracy
Hiring talent
Obtaining financing

TYPES OF ENTREPRENEUR
Here are a few types of entrepreneurs:
• Builder
Builders seek to create scalable businesses within a short time frame. Builders typically
pass $5 million in revenue in the first two to four years and continue to build up until $100
million or beyond. These individuals seek to build out a strong infrastructure by hiring the
best talent and seeking the best investors. They have temperamental personalities that are
suited to the fast growth they desire but can make personal and business relationships
difficult.

• Opportunist
Opportunistic entrepreneurs are optimistic individuals with the ability to pick out financial
opportunities, get in at the right time, stay on board during the time of growth, and exit
when a business hits its peak.
These types of entrepreneurs are concerned with profits and the wealth they will build, so
they are attracted to ideas where they can create residual or renewal income. Because
they are looking to find well-timed opportunities, opportunistic entrepreneurs can be
impulsive.

• Innovator
Innovators are those rare individuals that come up with a great idea or product that no one
has thought of before. Think of Thomas Edison, Steve Jobs, and Mark Zuckerberg. These
individuals worked on what they loved and found business opportunities through that.
Rather than focusing on money, innovators care more about the impact that their products
and services have on society. These individuals are not the best at running a business as
they are idea-generating individuals, so often they leave the day-to-day operations to those
more capable in that respect.

• Specialist
These individuals are analytical and risk-averse. They have a strong skill set in a specific
area obtained through education or apprenticeship. A specialist entrepreneur will build out
their business through networking and referrals, resulting in slower growth than a builder
entrepreneur.

4 TYPES OF ENTREPRENEURSHIP
• Small-Business
Small business entrepreneurship is the idea of opening a business without turning it into a
large conglomerate or opening many chains. A single-location restaurant, one grocery
shop, or a retail shop to sell your handmade goods would all be an example of small
business entrepreneurship. These individuals usually invest their own money and succeed
if their business turns a profit, which they live off of. They don't have outside investors and
will only take a loan if it helps continue the business.

• Scalable Startup
These are companies that start with a unique idea; think Silicon Valley. The hopes are to
innovate with a unique product or service and continue growing the company,
continuously scaling up as time moves on. These types of companies often require
investors and large amounts of capital to grow their idea and reach multiple markets.

• Large-Company
Large company entrepreneurship is a new business division created within an existing
company. The existing company may be well placed to branch out into other sectors or it
may be well placed to become involved in new technology. CEOs of these companies either
foresee a new market for the company or individuals within the company generate ideas
that they bring to senior management to start the process.

• Social Entrepreneurship
The goal of social entrepreneurship is to create a benefit to society and humankind. They
focus on helping communities or the environment through their products and services.
They are not driven by profits but rather by helping the world around them.

HOW TO BECOME AN ENTREPRENEUR
• Ensure Financial Stability
This first step is not a strict requirement but is definitely recommended. While
entrepreneurs have built successful businesses while being less than financially flush (think
of Facebook, now Meta, founder Mark Zuckerberg as a college student), starting out with
an adequate cash supply and ensuring ongoing funding can only help an aspiring
entrepreneur, increasing their personal runway and giving them more time to work on
building a successful business, rather than worrying about making quick money.

• Build a Diverse Skill Set
Once a person has strong finances, it is important to build a diverse set of skills and then
apply those skills in the real world. The beauty of step two is it can be done concurrently
with step one. Building a skill set can be achieved through learning and trying new tasks in
real-world settings. For example, if an aspiring entrepreneur has a background in finance,
they can move into a sales role at their existing company to learn the soft skills necessary
to be successful. Once a diverse skill set is built, it gives an entrepreneur a toolkit that they
can rely on when they are faced with the inevitability of tough situations.

• Consume Content Across Multiple Channels
As important as building a diverse skill set is, the need to consume a diverse array of
content is equally so. This content can be in the form of podcasts, books, articles, or
lectures. The important thing is that the content, no matter the channel, should be varied
in what it covers. An aspiring entrepreneur should always familiarize themself with the
world around them so they can look at industries with a fresh perspective, giving them the
ability to build a business around a specific sector.

• Identify a Problem to Solve
Through the consumption of content across multiple channels, an aspiring entrepreneur is
able to identify various problems to solve. One business adage dictates that a company's
product or service needs to solve a specific pain point; either for another business or for a
consumer group. Through the identification of a problem, an aspiring entrepreneur is able
to build a business around solving that problem. It is important to combine steps three and
four so it is possible to identify a problem to solve by looking at various industries as an
outsider. This often provides an aspiring entrepreneur with the ability to see a problem
others might not.

• Solve That Problem
Successful startups solve a specific pain point for other companies or for the public. This is
known as "adding value within the problem." Only through adding value to a specific
problem or pain point does an entrepreneur become successful. Say, for example, you
identify the process for making a dentist appointment is complicated for patients, and
dentists are losing customers as a result. The value could be to build an online
appointment system that makes it easier to book appointments.

• Network Like Crazy
Most entrepreneurs can't do it alone. The business world is a cutthroat one and getting any help
you can will always help and reduce the time it takes to achieve a successful business.
Networking is critical for any new entrepreneur. Meeting the right people that can introduce
you to contacts in your industry, such as the right suppliers, financiers, and even mentors can be
the difference between success and failure. Attending conferences, emailing and calling people
in the industry, speaking to your cousin's friend's brother who is in a similar business, will help
you get out into the world and discover people that can guide you. Once you have your foot in
the door with the right people, conducting a business becomes a lot easier.

• Lead by Example
Every entrepreneur needs to be a leader within their company. Simply doing the day-to-day
requirements will not lead to success. A leader needs to work hard, motivate, and inspire
their employees to reach their best potential, which will lead to the success of the
company. Look at some of the greatest and most successful companies; all of them have
had great leaders. Apple and Steve Jobs, Bill Gates and Microsoft, Bob Iger and Disney, and
so on. Study these people and read their books to see how to be a great leader and
become the leader that your employees can follow by the example you set.

7 CHARACTERISTICS OF ENTREPRENEURS
1. Versatile
When starting out, it’s essential to personally handle sales and other customer interactions whenever
possible. Direct client contact is the clearest path to obtaining honest feedback about what the target market likes
and what you could be doing better. If it’s not always practical to be the sole customer interface, entrepreneurs
should train employees to invite customer comments as a matter of course. Not only does this make customers
feel empowered, but happier clients are more likely to recommend businesses to others.
Personally answering phones is one of the most significant competitive edges home-based entrepreneurs hold
over their larger competitors. In a time of high-tech backlash, where customers are frustrated with automated
responses and touch-tone menus, hearing a human voice is one surefire way to entice new customers and make
existing ones feel appreciated; an important fact, given that some 80% of all business is generated from repeat
customers.

2. Flexible
Few successful business owners find perfect formulas straight out of the gate. On
the contrary: ideas must morph over time. Whether tweaking product design or altering
food items on a menu, finding the perfect sweet spot takes trial and error.
Former Starbucks Chair and CEO Howard Schultz initially thought playing Italian opera
music over store speakers would accentuate the Italian coffeehouse experience he was
attempting to replicate. But customers saw things differently and didn’t seem to like arias
with their espressos. As a result, Schultz jettisoned the opera and introduced comfortable
chairs instead.

3. Money Savvy
At the heart of any successful new business, a venture beats the lifeblood of
steady cash flow, which is essential for purchasing inventory, paying rent, maintaining
equipment, and promoting the business. The key to staying in the black is rigorous
bookkeeping of income versus expenses. And since most new businesses don’t make a
profit within the first year, by setting money aside for this contingency, entrepreneurs can
help mitigate the risk of falling short of funds. Related to this, it’s essential to keep personal
and business costs separate, and never dip into business funds to cover the costs of daily
living.

4. Resilient
Running your own business is extremely difficult, especially getting one started from
scratch. It requires a lot of time, dedication, and failure. A successful entrepreneur must
show resilience to all the difficulties on the road ahead. Whenever they meet with failure
or rejection they must keep pushing forward. Starting your business is a learning process
and any learning process comes with a learning curve, which can be frustrating, especially
when money is on the line. It's important never to give up through the difficult times if you
want to succeed.

5. Focused
Similar to resilience, a successful entrepreneur must stay focused and eliminate the noise
and doubts that come with running a business. Becoming sidetracked, not believing in your
instincts and ideas, and losing sight of the end goal is a recipe for failure. A successful
entrepreneur must always remember why they started the business and remain on course
to see it through.

6. Business Smart
Knowing how to manage money and understanding financial statements are critical for
anyone running their own business. Knowing your revenues, your costs, and how to
increase or decrease them, respectively, is important. Making sure you don't burn through
cash will allow you to keep the business alive. Implementing a sound business strategy,
knowing your target market, your competitors, and your strengths and weaknesses, will
allow you to maneuver the difficult landscape of running your business.

7. Communicator
Successful communication is important in almost every facet of life, regardless of what you
do. It is also of the utmost importance in running a business. From conveying your ideas
and strategies to potential investors to sharing your business plan with your employees to
negotiating contracts with suppliers all require successful communication.

A FEW QUESTIONS TO ASK YOURSELF:
• Do I have the personality, temperament, and mindset of taking on the world on my own terms?
• Do I have the required ambiance and resources to devote all my time to my venture?
• Do I have an exit plan ready with a clearly defined timeline in case my venture does not work?
• Do I have a concrete plan for the next "x" number of months or will I face challenges midway due to family, financial, or other commitments? Do I have a mitigation plan
for those challenges?
• Do I have the required network to seek help and advice as needed?
• Have I identified and built bridges with experienced mentors to learn from their expertise?
• Have I prepared the rough draft of a complete risk assessment, including dependencies on external factors?
• Have I realistically assessed the potential of my offering and how it will figure in the existing market?
• If my offering is going to replace an existing product in the market, how will my competitors react?
• To keep my offering secure, will it make sense to get a patent? Do I have the capacity to wait that long?
• Have I identified my target customer base for the initial phase? Do I have scalability plans ready for larger markets?
• Have I identified sales and distribution channels?

QUESTIONS THAT DELVE INTO EXTERNAL FACTORS:
• Does my entrepreneurial venture meet local regulations and laws? If not feasible locally, can I and should I relocate to another
region?
• How long does it take to get the necessary license or permissions from concerned authorities? Can I survive that long?
• Do I have a plan for getting the necessary resources and skilled employees, and have I made cost considerations for the same?
• What are the tentative timelines for bringing the first prototype to market or for services to be operational?
• Who are my primary customers?
• Who are the funding sources I may need to approach to make this big? Is my venture good enough to convince potential
stakeholders?
• What technical infrastructure do I need?
• Once the business is established, will I have sufficient funds to get resources and take it to the next level? Will other big firms
copy my model and kill my operation?

AN ENTREPRENEUR IS AN INDIVIDUAL WHO TAKES AN IDEA OR PRODUCT AND CREATES A BUSINESS, A PROCESS
KNOWN AS ENTREPRENEURSHIP. CREATING A BUSINESS REQUIRES A LOT OF WORK AND DEDICATION, WHICH NOT
EVERYONE IS CUT OUT FOR. ENTREPRENEURS ARE HIGHLY MOTIVATED RISK-TAKERS THAT HAVE A VISION AND
SACRIFICE A LOT TO ACHIEVE THAT VISION.
ENTREPRENEURS ENTER THE MARKET BECAUSE THEY LOVE WHAT THEY DO, BELIEVE THEIR PRODUCT WILL HAVE A
POSITIVE IMPACT, AND HOPE TO MAKE PROFITS FROM THEIR EFFORTS. THE STEPS ENTREPRENEURS TAKE FUEL THE
ECONOMY; THEY CREATE BUSINESSES THAT EMPLOY PEOPLE AND MAKE PRODUCTS AND SERVICES THAT
CONSUMERS BUY.
THANKYOU

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